GAO
Report tci CongressionaI Requesters
,
United States
General Accounting Office
Washington, D.C. 20548
National Security and
International Affairs Division
B-261547
June 12,1995
The Honorable Dale Bumpers
United States Senate
The Honorable Dick Zimmer
The Honorable Gerald Solomon
House of Representatives
As you requested, we have reviewed the current estimated costs of the
National Aeronautics and Space Administration’s (NASA) space station
program. More specifically, we estimated the total U.S. funding
requirements for the program and identified program uncertainties that
may affect those requirements.
The space station program was initially approved in the mid-1980s. Since
then, NASA has had to redesign the station several times to meet decreasing
budgets. The most recent redesign was done in late 1993 to compensate
for additional funding cuts and bring Russia into the program as a full
partner with Japan, Canada, the European Space Agency, and the United
States.
NASA estimates that the International
Space Station can be built and
completely assembled in orbit by June 2002. NASA said that the
International Space Station would provide more research capacity,
support more crew, and cost less than prior space station configurations.
NASAis currently planning a lo-year operational life for the space station
following completion of assembly.
The program is divided into three phases. The first phase involves seven
space shuttle flights to the Russian Space Station MIR on the orbiter
Atlantis to provide flight experience, demonstrate joint procedures with
the Russians, reduce technical risk during space station assembly, and
conduct scientific research and operations. The second phase comprises
the launch and assembly of the first elements of the space station on seven
shuttle flights to establish crew capability for three persons and the initial
laboratory environment. The second phase also consists of Russian flights
to launch the functional energy block, service module, a Soyuz rescue
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vehicle, universal docking module, and two science platforms. The last
phase involves the completion of the development and assembly of all
international partners’ hardware and the habitation module to establish
the station’s permanent six-person crew capability.
Results in Brief
We estimate U.S. funds required to design, launch, and operate the
International
Space Station will total about $94 bilhon through 2012 (about
$77 billion in fiscal year 1995 constant dollars).i This total may decrease to
the extent NASA accomplishes its goal for achieving station operational
efficiencies over the period 2003 to 2012, or efficiencies currently being
studied in the space shuttle program materialize.
The program has made major progress since last year in defining its
requirements, meeting its schedule milestones, and remaining within its
annual operating budgets. Nevertheless, the program faces formidable
challenges in completing all its tasks on schedule and within its budget.
The program estimates through fiscal year 1997 show limited annual
financial reserves-about
6 percent to 11 percent of estimated costs.
These reserves are even lower when reduced by the estimated value of
pending items that have a medium to high probability of being added to
the program. Inadequate reserves would hinder program managers’ ability
to cope with unanticipated technical problems. If a problem could not be
covered by available reserves, program managers could be faced with
either spending more than planned on the program or deferring or
rephasing other activities, thus possibly delaying the space station’s
development schedule or increasing its future cost.
In addition, the space station’s current launch and assembly schedule is
ambitious, and the shuttle program may have difficulty supporting it.
Moreover, the prime contract target cost could increase if the contractor is
unable to negotiate subcontractor agreements for the expected price, NASA
plans to complete an independent internal assessment of space station
program costs later this t&al year.
U.S. Funding
Requirements for the
Space Station
.~
Estimating total funding requirements requires aggregating past spending,
current budgets, and estimated future funding needs related to the
development and operation of the space station. As shown in table 1, we
estimate U.S. funding requirements for the design, launch, assembly, and
‘Constant 1995 dollars do not include estimated future years’ inflation. All dollar estimates in this
repot-t include inflation unless stated in 1995 dollars.
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lo-year operation of the International Space Station at about
$94 biIlion--over $48 billion to complete the assembly in June 2002 and
almost $46 billion to operate and conduct research for 10 years thereafter.2
The $94 billion estimate is discussed by program component after the
table.
%ese amounts represent NASA’s funding requirements and do not include the value of the
international partners’ contributions to the International Space Station program. A NASA official
estimated the contributions to be about $9.4 billion through June 2002, exclusive of Russia’s
contribution.
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Table 1: Estimated U.S. Funding
Requirements
for Space Station
Current dollars in billions
Requirement
Program
component
$11.2
Contract and in-house costs from 1985 through 1993
Current develoDment
budaet from 1994 to June 2002
$8.1
Developmenta
Utilization support”
0.7
OoerationsC
3.0
Payloadsd
2.6
Financial reserves
3.1
Station-related
I n-house
reauirements
throuah June 2002
$0.9
personnel
Principal investigator
0.3
support
0.4
Contract with Russia
Shuttle oerformance
enhancements
0.3
17.8
Shuttle launch support
Subtotal-requirements
U.S. requirements
$17.48
through
after assembly
$19.6
June 2002
$48.2
is completed’
$13.0
Operations/utilization
32.7
Shuttle launch support
$45.7
Total
$93.9
Note: Totals may not add due to rounding.
%cludes funding for the prime development
ground-based and on-orbit capability.
%cludes
contract and other contracts to develop operational
funding to provide the capability to support researchers
and use station resources.
“Includes funding to provide the capability to conduct ground and on-orbit sustaining engineering
for maintaining and operating the space station
dlncludes funds for developing the primary space station research facifilies, such as the
centrifuge and furnace: flying payloads to the MIR during the first phase; and modifying the
shuttle and acquiring docking hardware for the MIR missions. This portion of the space station
program is managed by NASA’s Office of Life and Microgravity Sciences and Applications,
eNASA agreed that it could design and develop the space station for this amount under a
$2.1 billion annual funding cap imposed by the executive branch in June 1993.
‘Does not include funding for in-house personnel to operate and utilize the station, station
disassembly and disposal, or any development activities after June 2002.
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Contract and In-House
Costs From 1985 Through
1993
Current Development
Budget From 1994 to
June 2002
NASA spent $11.2 billion designing and developing earlier versions of the
space station during fiscal years 1985 through 1993, including contractor
costs and the cost of NASA’S civil service staff working on the program,
When the International Space Station design was adopted, NASA estimated
that about 75 percent of the previously prepared design work could be
incorporated into the new configuration.
During the past year, program managers refined their development
estimate for the program’s elements. However, while cost estimates for the
individual elements changed, NASA'S total development estimate remained
at $17.4 billion. As a result of the refinements, NASA program managers
recognized significant increases in the costs of flight hardware items that
they had excluded from prior budgets and increased total financial
reserves. The managers also identified cost reductions by negotiating with
contractors, economizing and modifying user requirements and operating
methods, delaying the procurement of some spares and replacement parts,
and reducing the amount of testing.
For example, in one case, program managers identified about $93 million
in savings in the utilization support category by eliminating the
requirement for developing payload analytical software. This requirement
was eliminated when station managers opted to make station users-that
is, principal investigators (researchers)-responsible
for developing the
software needed to run their experiments. The research community’s
representative to the space station program office generally concurred
with these changes. However, users may require additional support to
finance their software development activities.
Program managers also reduced budget estimates by transferring
management responsibility for developing station hardware to
organizations that are more directly responsible for carrying out such
missions. For example, officials of NASA'S Office of Life and Microgravity
Sciences and Applications agreed to manage the development of some
laboratory support equipment and a rack to accommodate small payloads.
Transferring these items decreased the vahre of the space station
program’s utilization support budget by about $151 million but increased
the program’s payload category by $99 million, a tentative savings of about
$52 million. However, precise equipment needs are still being studied.
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Station-Related
Requirements Through
June 2002
In addition to NASA’S space station development budget and prior year
costs, we included in our life-cycle estimate other funding requirements
that are related to the International Space Station program. These total
about $19.6 billion through June 2002 and are discussed as follows.
In-House Personnel
NASA estimated that approximately
1,285 civil service staff will be required
annually through the completion of assembly at approximately $77,000 per
year-a total of $892 million. NASA expects some reductions in the number
of in-house personnel ‘during the assembly period, but estimates of such
reductions are not yet available.
Principal
Investigator
Contract
With Russia
Support
plans to conduct scientific research during the space station’s
development and assembly. NASA estimates it will spend about $134 million
through 2000 to fund principal investigators’ preparation of scientific
experiments to be flown on the partially assembled station and on flights
to MIR during the first phase. We extrapolated NASA’S estimates for the
remaining 2 years of the development program, for a total of about
$300 million.
NASA
Before bringing Russia into the space station program as a full partner,
NASA negotiated a $400 million contract with the Russian government for
hardware and managerial and technical expertise useful to space station
development.
Shuttle Performance
Enhancements
The space shuttle program is funding shuttle upgrades to provide
additional lift capability needed to support station element launches to the
space station’s 51.6-degree inclination orbit. Enhancements, currently
estimated about $300 million, include the super lightweight external tank
and other modifications and operational changes to increase the shuttle’s
performance.3
Shuttle Launch Support
The space station’s development program requires 35 shuttle flights to
carry out all three phases. The sequence consists of 7 flights to MIR as part
of the technology development program during the first phase, 6 utilization
flights to the partly completed space station to begin conducting research,
and 22 station assembly flights. At estimated average costs, these flights
total about $17.8 billion.
NASA plans 21 station assembly flights, but it has not included a flight to
launch the crew rescue vehicle, a necessity to outfit the space station for
“This estimate excludes funding requirements
cost-prr-flight estimates.
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that are already included in NASA’s average
GAOINSJAD-95-163
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-
--
permanent habitation, The launch vehicle for the crew rescue vehicle is
yet to be determined, but providing the crew rescue capability at the
completion of assembly is NASA’S responsibility. Program officials told us
they are taking steps to negotiate with the international partners the
provision of the crew rescue vehicle and its launch requirement, which
could reduce the U.S. portion of total funding requirements. However,
since no agreement has yet been reached, we included an extra station
assembly flight in our estimate.
Costs of shuttle launches are based on NASA’S estimates of the average cost
per flight.” Because NASA has budgeted to launch seven shuttle flights a
year, the average cost per flight has increased over prior years’ estimates
as total shuttle costs are averaged over fewer flights. NASA estimates that
the average shuttle flight will cost over $475 million in fiscal year 1998,
when the shuttle begins launching space station hardware.
We have
launches
incurred
program.
used average launch costs as the basis for costing shuttle
instead of marginal costs.” Marginal costs are expenses that are
or avoided when one flight is added to or deleted from the shuttle
The use of average launch costs is appropriate because the
majority of shuttle flights will be devoted to the space station for many
years. The space station either lengthens the life of the shuttle program,
requiring ground support facilities to be operated for additional years, or
displaces years of shuttle flights devoted to other uses.
U.S. Requirements After
Assembly Is Completed
---~
NASA estimated that the space station will require an average of $1.3 billion
annually for operations, research, and utilization support
during the
10 years after completion of assembly. NASA is studying how to reduce
operating costs to approximately $800 million annually. If NASA achieves
these station operational efficiencies. total estimated development and
operations costs of the space station would drop to about $89 billion.
planning models predict that an annual average of five of seven
available shuttle flights will be needed to support or use the space station.
NASA
dNASA’s average cost of a shuttle flight mcludes the estimated cost of safety and performance upgrade
projects of a recukng nature NASA estimated the average cost of a shuttle flight for each year up to
2000. For subsequent years, we inflated the average cost per flight using the gross domestic product
inflation index.
See Spare Station: Program Instability and Cost Growth Contmue Pending Redesign
(GIAWNSL4lXX-187, May 18, 1993); Space~ortation:
The Content and Uses of Shuttle Cost
Estimates (GAO/NSIAD-93-116, Jan. 28. 199% and Questions&maintthe
Costs, Uses, and Risks of
the Redesigned Space Station ((;r\O~-NSIAI)-I)l-~~~, May 1, 1991).
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-
At estimated average costs, shuttle launch support during this period
totals about $32.7 billion. NASA is currently studying how to further reduce
its shuttle operations costs. The station-related funding requirements
would decrease further if additional shuttle program efficiencies were
realized. NASA has not yet estimated these potential shuttle operations
savings.
When using average costs per flight, total shuttle launch costs to support
the space station during assembly and IO-year operational life are an
estimated $50.5 billion, or about 54 percent of the total space station
funding requirement.
Major Challenges to
the Program’s Cost
and Schedule
Financial Reserves Low in
Certain Years
requirements and identifying potential costs and risks. However, they still
have a difficult task in completing the program on schedule and within the
estimated budget. Among their challenges are (1) the low financial
reserves for the next few years; (2) significant cost, schedule, and
technical risk for the shuttle program in supporting the space station’s
assembly schedule; and (3) the lack of final agreements between the prime
contractor and all its major subcontractors.
Maintaining adequate financial reserves for the space station program
appears prudent to compensate for unanticipated program requirements.
However, low reserves in fiscal years 1996 and 1997 raise questions as to
whether NASA can implement the program within the $2.1 billion annual
funding cap the administration established in June 1993.
is planning to hold about $3 billion of the total development estimate
of $17.4 billion as financial reserves. However, as shown in table 2, the
estimated reserve levels for fiscal years 1996 and 1997 are 0.3 and
5.3 percent, respectively, after deducting possible cost increases that
program officials believe have a medium to high likelihood of occurring.
Because the funding requirements for many of these potential increases
are not well defined, the actual remaining reserves could be less. The
estimated value and a brief description of these potentid increases are
discussed in appendix I. NASA officials pointed out that these estimates
represent only a point in time and are considered internal planning
numbers.
NASA
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Table 2: Estimated
Reserves
Status of Financial
Current dollars in millions
Fiscal year
1995
19%
1998
1999
2000
2001
2002
$802
$584
$1,600
$1,217
$1,097
$929
102
182
525
621
603
534
394
52
97
97
121
170
377
260
79
46
5
85
404
451
226
254
315
4.5
5.6
11.4
43.1
56.6
64.9
66.6
67.5
2.1
.3
5.3
33.2
41.1
24.3
31.7
53.9
$2,159
$1,819
98
Potential cost
increases
Balance of
Station program
baselinea
Financial reserves
1997
reserves
Reserves as a
percent of station
program baseline
Reserves as a
percent of station
program baseline
after potential
cost increases
Note: Percentages
have been rounded.
‘This baseline excludes financial reserves, and the payload funding requirements
NASA’s Office of Life and Microgravity Sciences and Applications.
managed by
Inadequate reserves would hinder program managers’ ability to cope with
unanticipated technical problems. If a problem could not be covered by
available reserves, program managers could be faced with either
exceeding the annual cost cap or deferring or rephasing other activities,
thus possibly delaying the space station’s development schedule or
increasing its future cost.
Other Possible Significant
Challenges
NASA’S list of potential cost increases does not include at least two items
that could have significant future cost and/or schedule impacts. These
items are (1) the possibility that the prime contract target cost could
increase if the contractor
is unable to reach agreement
with its major
subcontractors for the expected price and (2) the ability of the shuttle
program to support the space station’s launch requirements.
In January 1995, NASA and the prime contractor signed a contract for
$5.6 billion, about $600 million less than the original target figure agreed to
in August 1994. However, because the prime contractor had not completed
negotiations with all of its major subcontractors, the contract contains a
clause that allows an increase in the target cost if the prime contractor is
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---
turable$o negotiate subcontractor agreements within the $5.6 billion price.
The prime contractor has reached agreement with two of its three major
subcontractors and is continuing negotiations with the third. If the prime
contractor is unsuccessful in negotiating a price with this subcontractor
that is within the $5.6 billion figure, the contract costs could increase. Any
increase would have to be funded by available financial reserves or by
reductions made elsewhere. However, program managers are not
considering this possibility on the list of potential cost increases. Thus,
any increase in the contract price could further erode the already slim
margin of reserves in the early years and further decrease program
managers’ flexibility to deal with unanticipated program cost increases.
The prime contract contains incentive features that encourage the prime
contractor to effectively manage its subcontract negotiations and costs6
The ability of the space shuttle program to adequately support its planned
station assembly schedule is uncertain, particularly in view of the ongoing
efforts to reduce program costs. A February 1995 NASA workforce review
concluded that the cost reductions had increased the risk that NASA could
not meet future flight schedules.’ A space shuttle program official told us
in May 1995 that the shuttle program would be facing its most demanding
operational challenge-supporting
the space station’s assembly
schedule-at a time when, due to budget cuts, it will have lost much of its
flexibility to adjust for contingencies. In addition, any problems with the
modifications needed to increase the shuttle’s lift capacity so that it can
support assembly of the station at the 51.6-degree inclination orbit would
also adversely impact the station’s assembly schedule. We will be issuing a
report later this year that provides more detail about the shuttle program’s
requirements for supporting the station, NASA managers said that the
shuttle program is committed to meet the challenge and that the current
performance upgrade program is proceeding well with adequate technical,
schedule, and budget margins. As evidence, the managers said that they
recently canceled two of the higher cost hardware items (lightweight
booster and extended nozzle) because they were not needed.
NASA is l&nning
to complete an independent assessment of the space
station program’s cost estimate by the end of fiscal year 1995. This
assessment is being done to provide the NASA Administrator’s Program
--
__--
‘The contract allows for adjustment of the contractor’s potentially available fee The available fee is
adjustable based on the outcome of negotiations at a rate of 25 percent of any increase or decrease in
target subcontract costs. For example, an increase in target subcontract costs would result in the
amount of potentially available fee being reduced by 25 percent of such increase.
rNASA Budgets Gap Between
_.~ Funding Requirements and Projected Budgets Has Been Reopened
(GAO/NS~~5~ay
12, 1995).
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Management Council8 an independent internal review of the program’s
technical and financial status.
----
Agency Comments
and Our Evaluation
In commenting on a draft of this report, NASA said that our report implied
that a significant portion of the total life-cycle cost estimate would
represent budget savings if the space station was canceled. NASA said that
unless the space shuttle program was also terminated, a substantial life
and microgravity sciences effort would be conducted aboard the shuttle in
the event of the termination of the space station program. We have
previously reported that we believe that space shuttle costs should be
included in any life-cycle cost estimate for the space station program. We
continue to believe it is appropriate to include requirements related to the
space shuttle. The use that might be made of the space shuttle should the
space station program be terminated would have to be separately
considered.
NASA’S complete comments and our evaluation of them are reprinted in full
in appendix II.
Scope and
Methodology
We reviewed NASA program planning and budgeting documents and
interviewed officials in the Space Station Program Office, the Space
Shuttle Program Office, the Office of Human Space Flight, the Office of
Life and Microgravity Sciences and Applications, and the Office of the
Comptroller. We reviewed actual to-date costs, budget and future-year
cost information for fiscal years 1995 through 2002, and estimated future
cost information through the current design life of the project. The
information provided in this report is based on NASA estimates. We
performed our review from March to June 1995 in accordance with
generally accepted government auditing standards.
Unless you publicly announce its contents earlier, we plan no further
distribution of this report until 30 days from its issue date. At that time, we
will send copies of this report to appropriate congressional committees,
the NASA Administrator, and the Director of the Offke of Management and
Budget. We will also make copies available to others on request.
XThe Program Management Council is composed of the Associate Administrators of NASA and is
chaired by the Deputy NASA Administrator. The council annually reviews major NASA programs
throughout
t.heir life cycles and makes recommendations to the Admmistrator.
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Please contact me at (202) 512-8412 if you or your staff have any questions
about this report. Major contributors to this report were Fknk Degnan,
James Berry, and Viiay Barnabas.
David R. Warren
Director, Defense Management and NASA Issues
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Contents
Letter
Appendix I
Potential Program
Cost Increases That
Threaten Space
Station Financial
Reserves
Crew Rescue Vehide
Logistics and Maintenance
Prime Contract Changes
EESII Implementation
Centrifuge Accommodations
Shuttle Integration
FGB
Pending Changes
Water Unit Processes
International Partners
Freedom Closeout
CLDF Operations and Maintenance/Liaison
Office Support
Appendix II
Comments From the
National Aeronautics
and Space
Administration
Tables
17
17
18
18
18
18
19
19
19
19
20
Table 1: Estimated U.S. Funding Requirements for Space Station
Table 2: Estimated Status of Financial Reserves
Table I. 1: Potential Cost Increases That Threaten Space Station
Financial Reserves
4
9
16
Abbreviations
CLDF
EESII
FGB
NASA
Page 14
Clear Lake Development Facility
element-to-element systems interface integrity
Functional Energy Block
National Aeronautics and Space Administration
GAO/NSIAD-95-163
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Page 15
GAOINSIAD-95-163Space Station Funding
Appendix I
Potential Program Cost Increases That
Threaten Space Station Financial Reserves
Table I. 1 shows the space station reserves and the items that managers
categorize
as having a medium or high likelihood of having to be
incorporated into the space station program and funded. A brief
explanation of each item follows the table.
Table 1.1: Potential Cost Increases
Current dollars in millions
-
That Threaten
Space Station
Financial
Reserves
Fiscal year
1995
1996
1997
1998
1999
2000
2001
2002
$98
$102
$182
$525
$621
$6d3-
$534
$394
Crew rescue vehicle
0
0
0
0
112
237
181
56
586
Logistics and
maintenance
1
23
19
44
3
100
83
17
290
20
20
20
24
0
0
0
0
-Financial
reserves
Threats against reserves
--
Total
----
$3,059
..__-
~-I_
Prime contract changes
-
04
EESII implementationa
1
24
18
12
10
0
0
0
65
Centrifuge
accommodations
1
1
1
5
15
22
IO
0
55
Shuttle integration
0
10
12
5
11
7
3
3
51
20
FGBb
0
5
10
5
0
0
0
0
Pending changes
Water unit processes
1
1
1
9
2
2
0
2
2
0
14
14
6
- 0
0
0
38
International
5
9
13
0
0
0
0
0
27
21
0
0
0
0
0
0
0
21
0
2
3
3
3
3
3
20
52
97
97
121
170
377
280
79
1,273
$451
$226
$254
$315
$1,766
Freedom
partners
closeout
CLDF” operations and
maintenance/liaison
office support
Subtotal
Balance
$46
$5
$85
aElernent-to-eletnent
$404
-3
-__
16
systems interface integrity.
bFunctional energy block.
%lear Lake Development
Facility.
---
Crew Rescue Vehicle
As we reported in 1994, the National Aeronautics and Space
Administration (NASA) initially anticipated that Russia would provide
Soyuz vehicles that would serve as crew return vehicles.’ However, Russia
‘Space Station: Update on the Impact of the Expanded Russian Role (GAO/NSIAD-94-248,
1994).
Page 16
GAONW4D-95-163
July 29,
Space Station
Funding
Appendix
Potential
Threaten
1
Program Cost Increases
Space Station Financial
That
Reserves
_---_-
has agreed to provide Soyuz vehicles only through the completion of
station assembly. NASA will be responsible for providing a crew
return/rescue capability after assembly is completed. NASA is studying
various options to determine the best way to provide this capability. The
$586 million estimate is based on a conWactor’s estimate for using an
Apollo-era capsule as the return vehicle. However, if a different option is
chosen, the estimate may change. NASA is also considering purchasing
Soyuz vehicles from Russia or having the European Space Agency develop
and provide a crew rescue vehicle. According to space station program
control office personnel, NASA has time to decide which option to pick
because development does not have to start until 1998 for the vehicle to be
available in 2002.
Logistics and
Maintenance
The logistics andmaintenance figure represents the procurement of flight
hardware spares. Funding for many spares was deferred during a prior
cost-reduction exercise until spares’ requirements could be better defined.
However, program managers recognize that it may be preferable to
purchase spares while the manufacturer has an ongoing production
capability, Purchasing spares once the production line has been shut down
could be more expensive and, in some instances, not feasible [for
example, if the manufacturer went out of business). The $290 million is an
estimate; the actual amount of spares to be purchased is under study using
a Navy-developed computer model.
Prime Contract
Changes .
Although NASA and the prime contractor signed the contract in
January 1995, they had not agreed on certain technical requirements for
developing the space station. At issue was t,he amount of analysis
necessary to verify that the hardware provided by international partners
could be effectively integrated with U.S. components. To avoid further
delaying the program, both parties agreed that the contractor would
continue studies to determine if any additional integration and verification
work was necessary. An amount of $24 million was set aside to support
these efforts. Program managers also reserved about $60 million to fund
additional technical requirements, if necessary.
-
~--
EESII Implementation
EESII tests and analyses are required to ensure that all the interfaces in the
flight hardware will function as planned. During cost-reduction exercises
in 1994, some of this testing was eliminated. However, program managers
have since realized that it would be required. The $65 million estimate is
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Appendix
Potential
Threaten
I
Program Cost Increases
Space Station Financial
That
Reserves
based on earlier estimates of the resources required to conduct such
testing. NASA teams are currently studying how much testing will actually
be required and the best way to accomplish it. A better estimate of
required funding may also result from the teams’ work. Space station
program control officials told us that this item would be incorporated into
the program and funded during the next budget cycle.
Centrifuge
Accommodations
NASA will have to provide housing for the centrifuge facility and is
reviewing four options: a duplicate U.S. laboratory module provided by
Boeing-Huntsville, a Spacelab “long module” provided by McDonnell
Douglas, a Spacelab double module provided by McDonnell Douglas, and
an additional Mini Payload Logistics Module provided by Alenia Spazio of
Italy. Space station program officials told us that the $55-million figure is
based on a rough order of magnitude estimate from the various
competitors, and that this item would be incorporated into the program
and funded during the next budget cycle.
Shuttle Integration
Currently, station and shuttle program managers are evaluating
requirements and the allocation of costs among programs. Station program
managers have estimated that up to $51 million of reserves would be
needed if requirements cannot be reduced. NASA headquarters officials
pIan to include these integration issues in the fiscal year 1997 budget
formulation process for resolution.
-
FGB
The FGB spacecraft will be the first space station element to be launched. It
will provide the initial propulsion, guidance, navigation, and control
functions for the space station. The FGB is a Russian-built spacecraft that
NASA is purchasing, and funding for it is included in the space station
development budget. The $20-million threat against reserves is for
installing a backup command and control ability for the FGB in the mission
control center in Houston, Texas, and changing the FGB specifications so
that it can function in a depressurized environment. According to NASA
officials, this amount decreased from an initial estimate of $25 million
because NASA will not have to pay for a remote manual docking capability.
Pending Changes
The $16 million shown represents several modifications that need to be
included in the baseline but have not been approved by space station
program management.
--~
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GAOLh’SIAD-95-163
Space Station
Funding
Appendix
Potential
Threaten
-
Water Unit Processes
International Partners
I
Program Cost Increases
Space Station Financial
That
Reserves
The amounts-shown for fiscal years 1995 and 1996 are to fund flight
exneriments
during the shuttle flights to the Russian MIR space station to
verify the design for the water processing system that will be used in the
U.S. habitation module. The total amount of $38 million also includes
funds earmarked in later years for any design changes that may be needed
based on the results of the early flight experiments.
provided by international
partners.
Freedom Closeout
The $21 million shown reflects an indirect rate issue with
Boeing-Huntsville related to the closeout of the space station Freedom
contract for Work Package 1. This issue is pending resolutionbyDefense Contract Audit Agency.
CLDF Operations and
Maintenance/Liaison
Office Support
cy Laboratory, a large underwater
facility for simulating a weightless environment, at the newly acquired
CLDF near the Johnson Space Center in Houston, Texas. The new
laboratory will be used to tram astronauts for space station assembly and
other space shuttle operations and wilI replace an older facility at
Johnson. Currently under negotiation is the station program’s share of the
new facility’s operations and maintenance costs and the program’s share
of the costs to support liaison offices in international partner countries.
Program managers have earmarked $20 million for these purposes.
Page 19
GAO/NSIAD-95-163
Space Station
Funding
Appendix II
Comments From the National Aeronautics
and Space Administration
Note; GAO comments
supplementing those in the
report text appear at the
end of this appendix.
National Aeronauticsand
Space Administration
‘
-dsuWashington,DC 20546OOOI
I
aI
Mt. David R. Warren
Director, Defense Management and NASA Issues
General Accounling Office
Washington, D.C. 20548
Dear Mr. Warren:
I have read GAO’s draft tcporl on inlcmalinnal Spree Slatinn lifecycle COSLS
and
would like to comment on a number of suhslanlive inaccuracies in the report.
See comment
1.
GAO’s draft report implics that tic Space Shuttlc program will have difficulty
meeting the Space Station ac$cmhly schedule. As Ihe NASA official with ultimate
responsibility for the Space Shuttic and inlcmaliogl Space Station programs, 1 am
fully confident that the cutrcnt launch requirements for the Space Station program can
he met by the Space Shuldc on schedule and wilhin budget.
See comment
2.
GAO’s lifecyclc cosf estimate of S97.Y billion includes $54.3 biBion of Shuttle
vansportation costs. Even if the Space Slalion was canceled, the NASA budgcetwould
slill contain thcsc Shutrtc COSIS.unless the Shultlc program itself was terminated. In
addition. a subslnntial life and microgravily sciences cfforl would be conducted aboard
the Shuttle in the event of the termination of the Space Station program. Therefore,
any implication [hat significanl money frnm these budget items could hc saved by the
cancellalion of Slirtion is erroneous.
See comment
3.
See comment
4
In calculating the cosl of Ihc Shultic transportation costs ahovc. GAO used the NASA
“new stan” index of 4.6% KI escafalt: cosls for inflalinn. NonnaIy. this index is used
foT programs that are in (he early s&es of dclinition and development, referred to as
Phase A/B. Since Lhc international Space Station is well inlo its development, or
Phase C/D stage, the cnrtcct escalalinn index is the Office of Management and
Budget’s (OMB’s) Gross Domcslic Product (GDP) intlator which is 3% for FY 1997
and beyond. The Office of Space Flighl (C)SF) uses the GDP inflator a~ guidance for
~11of our programs including Space Shultle and Space Station.
In the discussion of overage cclst-it-shuttle-night, Ihc repot1 slates that this average
cost does nut include about $30.2 billion spent through 1992 10 develop the Shuttlc,
acquire rcusahlc hardware and equipmcnl. and construct and modify facilities. Cosipet-flight has never included, and should nut includr. thc.sc “sunk” costs, including
Page 20
GAO/NSIAD-95-163
Space Station
Funding
Appendix II
Comments From the National
and Space Administration
Aeronautics
these numbers implies that they should be allocated against Space Scation when in
actuality the Shuttle program will support a multitude of payloads, the majority of
which will be non-Space Station payloads. Referencing this 530.2B is inconsistent
with the purpose of this report,
See comment 5,
As NASA has clearly stated to Congress in all Space Station program documentation,
including the Final Report to the Advisory Committee on the Redesign of the Space
Station, the Program Implementation Plan (PlP), and the November 1993 Addendum
to the PIP, the Station is being designed for a l@year life. This lifetime is the
baseline for all Space Station schedule and budge1planning. While the Space
Station’s life may be extendible, no plans currently exist to exercise that option.
See comment 6.
Finally, I would like to comment on GAO’s discussion of “threats” and reserve levels
When calculated as a percentage of the base program, Space Station development
budget reserves represent about 28% of remaining CDSLS
through Assembly Complete,
not l8% as indicated in GAO’s draft repon NASA views the “threats” list as a
management tool which is updated on a weekly basis as the program is better defined.
Items are added as they require program managers’attention. Potential changes are
evaluated, estimates refined, and then either eliminated or added to the baseline. The
numbers GAO displays reflect a snapshot in time and should be considered internal
planning numbers.
Thank you for the opportunity 10 review GAO’s draft report informally. If you have
any quesfions. please do not hesitate to contact me.
1. Wayne Litlles
Associate Administrator
for Space Flight
Page 2 1
GAOINSIAD-95-163
Space Station
Funding
GAO Comments
Appendix II
Comments From the National
and Space Administration
Aeronautics
The following are
comments on the NASA'S letter dated June 6,1995.
GAO'S
1. We added this position to the report.
2. Our report addresses program life-cycle cost. We have included
language in the report to recognize NASA'S concerns and emphasized onr
reporting objectives.
3. We revised our
index. We initially
and other outyear
average costs per
estimate to use the gross domestic product inflation
used NASA'S “new start” index to project future shuttle
costs principally because NASA used it to estimate
shuttle fight through 2000,
4. Our purpose was to show that shuttle development costs were not part
of the estimated cost to launch the space station and not to imply that
these costs should be allocated to the space station program. To clarify,
we deleted the footnote reference to shuttle development costs.
5. We revised the report to reflect that NASA has no plans to operate beyond
the planned lo-year period. Accordingly, we did not include costs in our
estimate of operating the space station longer than 10 years. However, it is
possible that the space station life could be extended. In the event that
Congress and the administration decide to continue using the station
beyond the planned lo-year period, we estimate funding requirements
would be about $5.1 billion a year. This is based on estimates of projected
operations and launch costs at the end of the IO-year operations period.
6. We recalculated the reserves as a percentage of the space station
baseline program, We also added language to reflect the tentative nature of
these potential cost increase estimates.
(709132)
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GAOINSIAD-96-163
Space Station
Funding
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